Pamela Curran, who is involved in a dispute with her ex-partner Brian Collins over ownership of their former home and a kennels business, leaving the Court of Appeal. Photograph: Paul Keogh

A sharp increase in the number of cohabiting couples over the past 15 years or so has led to a rise in complex and often costly legal disputes when they split up.

Despite what many believe – and around one in four people living together think they have the same legal protection as married couples, according to research by the Co-op – there is no status in English law as a common-law spouse or partner.

The number of unmarried couples has doubled since the mid 1990s to nearly three million, while the number of children living with unmarried parents has risen from 0.9 million in 1996 to 1.8 million in 2012. In addition, there are an estimated 6,000 same-sex couples, not in a civil partnership, who have children.

However, virtually nothing has changed in how the law treats cohabiting couples and their property if they separate.

"Basically the law does not recognise in any meaningful way a living-together relationship outside marriage or civil partnership," says Christina Blacklaws, director of family law at Cooperative Legal Services.

If a cohabiting relationship breaks down there is very little protection for the weaker partner, typically the woman, who often has children. As a result, some cohabiting families can find themselves facing real difficulties should they split up, particularly when children are involved.

In England and Wales, when married couples divorce or civil partners break up (known as dissolution rather than divorce), both parties have a legal right to maintenance and their share of assets, including property and inherited property. The judiciary has complete discretion under marital law to take all the circumstances and history of the relationship into account and decide on a fair division.

Cohabiting couples have no such rights, regardless of the number of years they have been together and whether they have children.

Say, for example, partner A moves into partner B's property (partner B, whose name is on the deeds, is the sole owner), they live together and maybe have children. If they separate, whether after five, 10 or even 30 years, partner A has no right to personal maintenance from partner B even if she has always been supported financially.

Partner A also has no legal right to a share of the property, even if he or she has contributed to the mortgage or paid in other ways, such as staying at home to care for the children. So, unless partner B voluntarily agrees to a settlement, partner A could become homeless unless she can afford to go to court – (see the box, right, on the case of Pamela Curran) and even then there's only a limited chance of success.

"Any attempt to claim part of the property in such a case is fraught with difficulties, because what you have is a situation where there is no law," Blacklaws says. "All the courts can do is try to bring fairness using cobbled-together bits of other legislation on property, land and trust law but it is legally and technically complex. Therefore it can cost an enormous amount of money to fight it out in court."

Where cohabiting couples jointly own their family home, in English law the property will automatically be divided 50:50 – even if one partner contributed more to its purchase – unless they made a written legal agreement at the time of purchase saying in what proportions they own it. Again, if one partner wants to challenge this in court, it is likely to be costly and there is no guarantee they will win.

Despite the Law Commission making recommendations in 2007 that the rights of cohabiting partners upon separation should be increased, nothing much has changed. The current government indicated in 2011 that it had no plans to act on the proposed reforms.

As the law stands, the only solution for cohabiting couples who want legal protection should they split up is either to marry or enter a civil partnership, or to draw up a cohabitation agreement, otherwise known as a living together agreement or "no nup".

So what is a cohabition agreement?

It sets out who owns what and in what proportion and lets you document how you will split your property, its contents, personal belongings, savings and other assets should the relationship break down. It can also cover how you will support your children, over and above any legal requirements to maintain them, as well as how you would deal with bank accounts, debts, and joint purchases such as a car.

The agreement can also be used to set out how you and your partner will manage your day-to-day finances while you live together, such as how much each contributes to rent or mortgage and bills, and whether you will take out life insurance on each other.

Isn't that a bit unromantic?

Maybe, but being realistic when you first get together can save emotional and financial heartache in the future. A living together agreement lets you agree things in a fair way at the outset without the pressures that can arise if a relationship breaks down.

How is the agreement put together?

Beforeseeing alawyer, couples should agree on who owns what, how their assets should be divided in the event of a split and what they want from the agreement. One partner then pays their lawyer to get the agreement properly drawn up and a copy is sent to the other partner, who ideally should get their own lawyer to go through it. Once both parties are satisfied with the agreement, the document is signed and witnessed.

Is it legally binding?

"Yes, so long as it is properly effected – which means both parties getting independent legal advice on the agreement. Then it will have full force of law," says Blacklaws. This is to avoid later allegations of undue duress such as, "my partner made me sign it".

"If a couple does break up, then any court will abide by such a contract though, in practice, we find that if people have gone to the effort of getting a cohabitation agreement they tend to abide by it themselves if they split up, without the need for the courts to get involved."

What will it cost?

This can vary and depends on the complexity of your affairs. "Drawing up a full cohabitation agreement would typically take between 10 and 15 hours, including the initial meeting, drafting the document and making any subsequent amendments up to the final sign-off. The costs depend on who you instruct, but I would say between £2,500 and £3,000 for a comprehensive agreement," says Ashley Palminteri of The Family Law Practice.

Couples should add another £500 for the second partner to pay their own solicitor for independent advice on the agreement, he says.

Undercutting the hourly fee-based prices charged by many law firms, Cooperative Legal Services charges a fixed fee of £660.00 including VAT for drawing up a cohabitation agreement. Couples again need to add on the cost of the second partner's legal advice.

That sounds a bit pricey

The lawyers argue that the cost of a "no nup'" is nothing compared with what it could cost to sort things out in court if you break up without an agreement. "Fighting it out in court can run into tens of thousands of pounds," Blacklaws says.

Is there a DIY way?

You can draw up a "no-nup" agreement by downloading ready-made cohabitation agreement templates with guidance notes, usually drafted by a family law solicitor, from online legal publishers such as Lawpack.co.uk and Netlawman.co.uk for £10-£15. But for any agreement to stand a chance of being upheld by the courts, both parties must each take independent legal advice and there can be no mistakes in the agreement.

You are probably best off discussing and drawing up any cohabitation agreement with a specialist family law practitioner.

Should we do anything else to protect ourselves legally?

Make wills. If you die intestate – without leaving a will – there are strict rules about who gets what, and nowhere in English law are cohabiting partners recognised. If you are not married or in a civil partnership, the only way you can make sure your partner will inherit if you die is to make a will.

• Note that the situation is different in Scotland where cohabitation and property rights are defined under the Family Law (Scotland) Act 2006.